Dr. John B. Weltmer, Jr. v. Signature Health Services Inc. f/k/a Premier Care, Inc., St. Louis County Orthopedic Group Inc., SLCOG Property Management & Leasing Company, LLC, and Premier Care Leasing, LLC

CourtMissouri Court of Appeals
DecidedJanuary 21, 2014
DocketED99553
StatusPublished

This text of Dr. John B. Weltmer, Jr. v. Signature Health Services Inc. f/k/a Premier Care, Inc., St. Louis County Orthopedic Group Inc., SLCOG Property Management & Leasing Company, LLC, and Premier Care Leasing, LLC (Dr. John B. Weltmer, Jr. v. Signature Health Services Inc. f/k/a Premier Care, Inc., St. Louis County Orthopedic Group Inc., SLCOG Property Management & Leasing Company, LLC, and Premier Care Leasing, LLC) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dr. John B. Weltmer, Jr. v. Signature Health Services Inc. f/k/a Premier Care, Inc., St. Louis County Orthopedic Group Inc., SLCOG Property Management & Leasing Company, LLC, and Premier Care Leasing, LLC, (Mo. Ct. App. 2014).

Opinion

In the Missourt Court of Appeals

Castern District DIVISION FOUR DR. JOHN B. WELTMER, JR., ) ED99948 ) ED99553 ) Appellant, ) Appeal from the Circuit Court ) of St. Louis County vs. ) ) SIGNATURE HEALTH SERVICES INC. ) Honorable Gloria C. Reno fikfa PREMIER CARE, INC., ST. LOUIS — ) COUNTY ORTHOPEDIC GROUP INC., _ ) SLCOG PROPERTY MANAGEMENT & ) LEASING COMPANY, LLC, and ) PREMIER CARE LEASING, LLC ) ) Respondents. ) Filed: January 21, 2014 Introduction

Dr. John B. Weltmer, Jr, (Weltmer) appeals the trial court’s grant of summary judgment in favor of Signature Health Services Inc., f/k/a Premier Care, Inc., St. Louis County Orthopedic Group Inc. (SLCOG), and SLCOG Property Management & Leasing Company, (SLCOG Property), LLC and Premier Care Leasing, LLC (collectively, Signature), On appeal, Weltmer argues the trial court erred in granting summary judgment because there were genuine issues of disputed material fact and there was no

accord and satisfaction, erred in granting Signature’s motion for attorney fees, and erred

in denying Weltmer’s motion for additional time to conduct discovery. We reverse in

part and remand.

Background and Procedure

Weltmer was both a shareholder and employee of Signature, working at the South Division office. He entered into an Employment Agreement for Shareholder Physician (the Employment Agreement) and a Shareholder Agreement/Stock Purchase and Transfer Restriction Agreement (the Shareholder Agreement) in 2001. Pursuant to the Employment Agreement, Weltmer could be terminated for cause by an affirmative vote of at least two-thirds of the members of the Signature board of directors. Weltmer was terminated for cause on August 5, 2009. Following Weltmer’s termination, Signature issued Weltmer two checks for $21,850.00 and $146,884.80, representing its calculation of the value of Weltmer’s equity interest in Signature. Weltmer signed and deposited both checks, writing “partial buy out” on the backs of both checks.

Weltmer filed suit against Signature. In his second amended petition, Weltmer claimed, as relevant to this appeal, breach of the Employment Agreement, asserting that he was not terminated for cause and the board of directors did not vote on whether to terminate his employment; and breach of the Shareholder Agreement, asserting that Signature’s liquidation of Weltmer’s equity interests was not done in accordance with generally accepted accounting principles and violated the Shareholder Agreement.

Signature moved for summary judgment, arguing it was entitled to judgment as a matter of law because Signature did not breach the Employment Agreement in Weltmer’s

termination, Weltmer’s act of cashing the checks constituted an accord and satisfaction of

his claims, and Signature properly calculated Weltmer’s equity interests. Signature asserted through exhibits and affidavits that at the time of Weltmer’s termination, there were seven members on Signature’s board of directors. At a special meeting in July of 2009, all seven members voted to terminate Weltmer for cause. The written resolution set forth the reasons for Weltmer’s termination as “including but not limited to”:

i, making false allegations to his peers and the general public of the

alleged occurrence of financial and tax improprietics of [Signature]; and

ii, making false allegations of the misuse of profits and distribution in an ambulatory surgery center owned in part by [Weltmer] ... ; and iii. using a credit card, personally guaranteed by another physician in

[Weltmer]’s division, for personal use without the ability or intent to repay; and

iv, using a [Signature] issued credit card for personal use without the ability or intent to repay; and

v. communicating with [Signature] employees in an unprofessional and derogatory manner.

Martin Zaegel (Zaegel), Signature’s Chief Financial Officer and a certified public accountant, attested that he calculated Weltmer’s equity interests in Signature as follows. Weltmer’s Signature stock was valued at $2,000.00 for purposes of liquidation. Weltmer’s interest in the SLCOG was $142,252.00, calculated using 2008 tax documents as: the total assets ($3,464,471.00), less liabilities ($914,040.00), less the book value of the building ($558,898.00), divided by the number of owners (14). Zaegel subtracted from Weltmer’s total interest in SLCOG $18,769.20 for personal expenses Weltmer had charged to Signature’s credits cards but not repaid, for a total equity interest in SLCOG of $125,482.80 ($142,252.00, plus $2,000.00, less $18,769.80). From Weltmer’s total

equity interest in SLCOG, Zaegel subtracted $250,000.00 for the amount Weltmer had

received in advances from Signature but had not repaid. Applying this debt, the balance Weltmer owed Signature was $124,517,20.

Next, Zaegel valued Weltmer’s interest in SLCOG Property at $271,402.00, calculated using 2008 tax documents as: total assets ($6,178,960.00), less liabilities ($1,760,092.00), divided by the number of owners (14). Zaegel subtracted the amount Weltmer owed Signature from his interest in SLCOG Property, for a total equity interest in SLCOG Property of $146,884.80. Last, Zaegel valued Weltmer’s interest in Premier at $21,850.00, calculated using 2008 tax documents as: total assets ($3,046,625.00), less liabilities ($2,703,696.00), divided by the number of owners (16).

Accordingly, Zaegel issued Weltmer two checks for his equity interests in Signature, SLCOG, SLCOG Property, and Premier: one check in the amount of $21,850.00 and one check in the amount of $146,884.80. The checks were offered with the following statement:

[Weltmer’s] equity interests in Signature, SLCOG, [Premier] and

SLCOG Property have been terminated effective today pursuant to the

various shareholder/operating agreements. His interests in such entities

have been valued in accordance with the applicable agreements. The

redemption proceeds payable to Dr. Weltmer from these entities, reduced

by setoff of amounts due and payable to Dr. Weltmer effective today,

result in a net balance due to Dr, Weltmer of $168,734.80. Checks

payable to Dr. Weltmer in that amount are enclosed herewith.

Weltmer signed and cashed the checks, writing “partial buy out” on the backs of both checks. Signature claimed that by cashing the checks Weltmer accepted the proffered amount as a full and final settlement of his equity interests in Signature, and that,

moreover, Weltmer admitted in his deposition he did not know whether Zaegel’s

calculations were incorrect,

In response to Signature’s motion for summary judgment, Weltmer asserted there were more than seven members on the board of directors, attaching Signature’s 2009 Annual Registration Report filed with the Missouri Secretary of State, which named 59 directors, Thus, he claimed the seven members who voted were substantially less than two-thirds of ali the board of directors. Moreover, he asserted that in an October 2009 (two months after the vote to terminate him) conversation with Katherine Burns, president of Signature in 2009 and a member of Signature’s board of directors, she did not know he had been terminated. In addition, Weltmer denied the allegations upon which his termination for cause was based, and argued the written resolution setting forth the reasons for his termination was unauthenticated hearsay. While Weltmer agreed that his wife had charged approximately $17,000 on the company credit card, he asserted everyone used the company credit cards and paid off the charges through bonuses. Weltmer attached deposition testimony in which he asserted his intention to repay the charges.

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Dr. John B. Weltmer, Jr. v. Signature Health Services Inc. f/k/a Premier Care, Inc., St. Louis County Orthopedic Group Inc., SLCOG Property Management & Leasing Company, LLC, and Premier Care Leasing, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dr-john-b-weltmer-jr-v-signature-health-services-inc-fka-premier-moctapp-2014.